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Axis Bank ties up with PayNearby, aims to boost priority sector lending

Private lender's portfolio of rural loans was at Rs 58,800 cr at the end of the first quarter this financial year

Topics
Axis Bank | Banking sector | lending

Bhaskar Dutta  |  Mumbai 



Photo: Bloomberg
The tie-up will be used to set up current and savings accounts for both retail and individual customers in remote areas

Announcing a partnership with branchless banking network PayNearby, a senior executive of said on Wednesday that such tie-ups would aid the private lender in achieving priority sector aims.

“The priority sector targets that we have in our own business, if we have a shortfall, we have to build up through PSLCs (priority sector certificate) or something else. It is ensuring that we meet the requirements of the bank,” said Munish Sharda, group executive and Head of Bharat Banking.

aims to meet its priority sector targets in an organic manner, taking advantage of the PayNearby’s distribution-as-service network of 50 lakh micro businesses.

The tie-up will be used to set up current and savings accounts for both retail and individual customers in remote areas, said the said in a press release.

“We are looking at the penetration in these markets, then the growth rates that we are getting and then the cost at which we are acquiring,” Sharda told reporters.

guidelines say 40 per cent of net bank credit is to be extended to the priority sector, which includes agriculture and micro, small and medium enterprises.

Sharda refused to say how many of the 50 lakh micro businesses of PayNearby would be brought on board by through the partnership. The process of on-boarding these business would be in line with internal checks and balances of Axis Bank, Sharda said, adding that the bank’s brand would be present at retail outlets.

Axis Bank’s portfolio of rural loans was at Rs 58,800 crore at the end of the first quarter of the current financial year, registering a rise of 4 per cent quarter-on-quarter.

Out of Axis Bank’s network of 4,759 branches, 2100 are classified as Bharat Bank branches and the lender’s focus is to grow at a faster clip than the rest of the market and the rest of the branch network in the industry, Sharda said.

“It’s one of the top three priorities for the bank and Bharat Bank is one key initiative that the bank is pursuing. It has to become significant and profitable for the bank in the medium to long term. There are some strategic purposes which we are doing this,” he said.

“We think we have an opportunity to get a higher share by a reasonably focused approach in these markets,” he said.

According to a statement on Axis Bank’s website dated September 2021, the Bharat Banking segment witnessed annualised growth of 18 per cent, while contributing to 25 per cent of incremental retail disbursements. The rural deposits also grew at 19 per cent over the previous year.

While saying that the traction seen in the Bharat Banking segment so far this year had been good, Sharda declined to provide figures.

Axis Bank's advances grew 14 per cent year-on-year to Rs 701,130 trillion and deposits increased 13 per cent on-year to Rs 8,03,572 trillion as on 30 June 2022.


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First Published: Wed, September 07 2022. 18:42 IST

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